Public will vet SDG&E's wildfire cost recovery

State regulators will hold a public hearing in San Diego about a controversial proposal by San Diego Gas & Electric to recover uninsured costs from the catastrophic 2007 wildfires through a new set of policies and procedures, a member of the California Public Utilities Commission announced Thursday.

Triggered in large part by SDG&E lines, the October fires killed two people and destroyed 1,300 homes in northern San Diego County. With hundreds of claims still pending and its insurance exhausted, the utility has estimated it could still pay out $463 million.

At stake in the utility commission proceedings is who ultimately pays for the fire’s destruction — ratepayers or shareholders. If a “Wildfire Expense Balancing Account” is approved, SDG&E could seek from customers between 95 percent and 100 percent of excess wildfire and related litigation costs in which the utility did not intentionally ignore safety measures.

Utilities Commissioner Timothy Simon said he was encouraged by elected officials from the San Diego area to hold the local public hearing, now scheduled for 4 to 9 p.m. April 5 at the Al Bahr Shriners Memorial Auditorium on Kearny Mesa Road.

An attorney representing hundreds of individual wildfire plaintiffs said one hearing may not be enough to accommodate the public.

“You are talking about thousands and thousands of people,” said attorney Robert Jackson. “You are going to be surprised.”

The entire five-member utilities commission should eventually vote on SDG&E’s application, with a recommendation likely to be heard from an administrative law judge.

On Thursday in San Francisco, Simon listened as SDG&E defended its proposal against criticism from utility-customer advocates and the commission’s own Consumer Protection and Safety Division.

Much of the discussion focused on whether SDG&E concealed its plans to eventually recover wildfire costs within an application ostensibly designed to deal with future fires and possible insurance shortfalls.

Two state investigations found that SDG&E lines, and to a lesser degree Cox Communications equipment, caused the October 2007 fires, which spread quickly under dry conditions and gusting Santa Ana winds.

San Diego Gas & Electric denies it was ever at fault, but apologized previously for obstructing investigators looking into the root causes.

In 2009, SDG&E agreed to pay $14.4 million to the state’s general fund to settle accusations that shoddy maintenance led to the blazes.

The new standards for recovering costs would apply not only to uninsured costs of the 2007 wildfires but also liabilities for future fires.